Earnings Preview: Amgen to Report 3Q Results
Amgen will focus on the integration and strategy behind its acquisition of Onyx Pharmaceuticals, which makes two cancer drugs and has others in testing, when it reports third-quarter results late Tuesday.
WHAT TO WATCH FOR: Amgen executives will stress how their Oct. 1 purchase of Onyx — worth $9.7 billion, nearly their biggest deal ever, most of it borrowed — will help them expand in the lucrative market for cancer drugs.
The world's biggest biotech drugmaker is best known for rheumatoid arthritis treatment Enbrel and Prolia for osteoporosis. It brings in billions from medications that alleviate side effects of cancer treatment, including Aranesp and Epogen for anemia and Neulasta and Neupogen for boosting infection-fighting white blood cells.
The Thousand Oaks, Calif.-based company is testing drugs for malignant melanoma and ovarian cancer, and it makes Vectibix for colorectal cancer, but annual sales are less than $400 million.
The Onyx purchase should enable Amgen to become a major player in cancer medicine.
Research chief Sean Harper will give an update on Amgen's key experimental drugs, particularly AMG 145 for reducing bad cholesterol in patients not helped enough by widely used pills.
Analysts may ask about a recent study disappointment: Heart failure drug omecamtiv mecarbil didn't meet its goals of reducing shortness of breath and deaths. Amgen is continuing other studies of it.
Amgen may discuss its international expansion efforts, notably new partnerships to sell an Amgen drug and open a research center in China.
WHY IT MATTERS: Because its drugs are produced by living cells rather than combining chemicals, Amgen so far has been spared generic competition. But that's looming in a few years. And Pfizer Inc.'s new rheumatoid arthritis pill, Xeljanz, may crimp sales of Amgen top seller Enbrel. So new medicines, or at least promising experimental ones, are crucial.
WHAT'S EXPECTED: Analysts polled by FactSet, on average, expect earnings per share of $1.77 on sales of $4.6 billion.
LAST YEAR'S QUARTER: Amgen reported net income of $1.11 billion, or $1.41 per share, on revenue of $4.32 billion.
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